President-elect Joe Biden ran on a platform that included proposals to shore up Social Security benefits while extending the program’s solvency. How his administration and the next Congress take shape will help determine just how many of those changes he may be able to put through. To experts and advocates for the program, the timing could not be more crucial.
“We’re long overdue for this conversation, and it’s causing great uncertainty for people who are either on the program now or going to be on the program soon,” said Shai Akabas, director of economic policy at the Bipartisan Policy Center. “That’s not how we should be running one of the most important safety net programs in the country,” he said.
For Biden, now comes the hard part of pushing for bipartisan reform.
Biden’s Social Security platform includes key benefit increases. Eligible workers would get a guaranteed minimum benefit equal to at least 125% of the federal poverty level. People who have received benefits for at least 20 years would get a 5% bump. Widows and widowers could receive about 20% more per month.
Biden also proposes changing the measurement for annual cost-of-living increases to the Consumer Price Index for the Elderly, or CPI-E, which could more closely track the expenses retirees face.
To pay for the changes and extend the program’s solvency, Biden would apply Social Security payroll taxes to those making $400,000 and up. In 2020, only wages up to $137,700 are subject to those levies.
Other Democrats have proposals that similarly expand benefits and raise taxes without implementing cuts. Some politicians have advocated for more targeted changes to be included with upcoming legislation.
For example, Biden’s coronavirus stimulus plans call for increasing Social Security checks by $200 per month during the pandemic, an idea that has also been proposed by other politicians. Two House Democrats have separately proposed putting an emergency cost-of-living adjustment in place, which would bring next year’s benefit increase up to 3% from 1.3%.
It remains to be seen whether the presidential leadership transition will also trigger changes at the top of the Social Security Administration, which administers benefits.
By: Joyce Trudeau of Premier Disability Services, LLC®